Schiff In Crisis Mode

DANIELA ALTIMARIThe Hartford Courant

Peter Schiff turns on his computer and checks his fundraising numbers with the studied nonchalance other guys might display while perusing last night's box scores.

It's a Friday in early August and Schiff's fans have set off a "money bomb" - a 24-hour pledge blitz they hope will persuade him to run for the U.S. Senate seat held for almost 30 years by Christopher J. Dodd.

Schiff, the Fairfield County stockbroker and author who has become YouTube's most popular prognosticator of financial doom, says he will make up his mind by Labor Day. But spurred on by a cadre of young and zealous followers from around the nation, and a fundraising total that is closing in on $1 million, he is leaning toward a run.

Unlike most politicians, including his hero, Ronald Reagan, he does not traffic in unbridled optimism: It's twilight in Peter Schiff's America, and, if painful and drastic changes aren't made soon, he foresees an economic depression lasting at least a decade. The future, as envisioned by Schiff, will be marked by rampant inflation - a gallon of gas could cost $10 - food shortages and rolling blackouts, unless government sharply shrinks and the free market is allowed to flourish.

The current crisis is "payback for a decade of reckless monetary policy," Schiff says. "The recession is not the problem, the recession is the cure. It's not fun, just like heroin withdrawal is not fun . . . but it's necessary."

Schiff, who has never run for public office before - in fact, hasn't even voted in years - says he'd run as a Republican, albeit one squarely within the GOP's libertarian wing, which is led by renegade Texas congressman Ron Paul.

"I'm not running as an academic exercise," Schiff says. "I'm running to win . . . and if I can't run as a Republican, I can't win."

There are already three other Republicans gunning for Dodd, and a fourth, World Wrestling Entertainment CEO Linda E. McMahon, announced she's considering a run as well. Moreover, it's not clear how Schiff's slick style, quirky family history (his 81-year-old father is in prison for refusing to pay income tax), and unorthodox views on the U.S. economy would mesh with Connecticut's Republican establishment.

"It's an open party and it's a free country," says GOP State Chairman Chris Healy, who is maintaining a neutral stance. He doesn't know much about Schiff, except for what he's seen on TV, but adds, "He's raised a lot of money so far and I think that's impressive, so we'll see what happens."

Schiff's eat-your-spinach ethos may resonate with the Tea Party crowd and others who are suspicious of President Barack Obama and the Democrats in Congress. And Libertarians here and around the nation have already rallied to Schiff, who was Ron Paul's economic adviser during Paul's unsuccessful presidential bid. "I like that he talks straight," says Rich Lion, head of the party in Connecticut. "He's not a professional politician."

Gary Rose, who chairs the department of government and politics at Sacred Heart University in Fairfield, doubts that's enough to propel this insurgent into the exclusive club that is the U.S. Senate.

"Schiff has some excellent points, and he can certainly articulate those points very clearly," Rose says. But securing the Republican nomination in a state such as Connecticut will be a challenge for such a Libertarian. "He's really on the margins of the Republican Party and, at this point, he's without a doubt, a real long shot. . . . I'm not so sure the voters are ready for his message."

Still, Rose adds, a Schiff candidacy would be "entertaining."

Schiff makes his living as president of Euro Pacific Capital, a brokerage firm headquartered in Westport. But he made his reputation forecasting the current economic crisis.

In 2006, before the housing market toppled and the economy sputtered to a halt, Schiff was on CNBC and Fox News, predicting the worst. He wrote a book, "Crash Proof: How to Profit from the Coming Economic Collapse," in 2007. A video compilation of Schiff's pronouncements on YouTube - dubbed "Peter Schiff Was Right" - has been viewed more than 1.4 million times.

Not everyone agrees. Illinois investment adviser Mike "Mish" Shedlock questions some of Schiff's views, notably his prediction that the U.S. economy would melt down while the rest of the world stayed strong. "He never has anything good to say about the U.S. dollar or the U.S. political system," Shedlock says. "It's almost as if the man hates the United States."

But despite writing a blog post titled "Peter Schiff Was Wrong," Shedlock concedes that Schiff got some things right. "He certainly called the housing bubble correctly," and supports his Senate candidacy. "I believe he has the right ideas about what we need to do to fix government," Shedlock says.

LESSONS FROM HIS FATHER

In person, Schiff is less bombastic, more analytical. He is 46, with a close crop of graying waves, a trim build and an air of supreme confidence. On this day, his Weston home is a hive of activity. His company is holding a meeting here later in the afternoon, and his 7-year-old son has just arrived. (Schiff and the boy's mother are divorced, but she lives nearby and they share custody.)

Schiff, the older of two boys, spent his early years in Connecticut, his father's home state - his paternal grandfather was a carpenter who helped build the Yale Bowl. His parents divorced when he was 5 and, though Schiff lived with his mother in New York and Florida, he spent considerable time with his father.

In fact, the father's narrative is intertwined with the son's. Irwin Schiff is a UConn graduate who sought the Libertarian Party's presidential nomination in 1996 and has been fighting U.S. tax laws since the 1970s. He has been convicted of income tax evasion and other tax crimes numerous times and is currently in a federal prison in Indiana.

"His health is failing," Peter Schiff says. The elder Schiff recently had to be hospitalized. "To be 81, sick and shackled to a hospital bed is not a pleasant experience."

Schiff learned a lot from his father about Austrian economics, the gold standard and the ins and outs of U.S. tax policy. "My dad didn't lie about anything," Schiff says. "He told the government he wasn't paying his taxes and here's why. . . . The worst you can say about my dad was that he was mistaken."

Unlike Irwin Schiff, Peter Schiff pays his taxes, though the son concedes the father will "probably be an issue in the campaign."

Schiff anticipates another criticism, too: that he's "un-American," because he invests his clients' money in China and Saudi Arabia and because he wrote a book offering suggestions on how to profit from the coming economic collapse.

"I'd rather be investing in America," he says. "I'd rather have written a book titled 'How to Profit from the Coming Economic Boom.' "

And then there's the matter of his non-voting record. Schiff says he was registered to vote in California but never bothered to register when he moved back to Connecticut in 2004. He wanted to vote for Ron Paul in the Republican primary last year but missed the deadline.

In Schiff's view, voting usually isn't worth the bother. "Most candidates are so unappealing," he says. And most of the time, he adds, there isn't much difference between them.

So why is he running?

Good question. "It's a huge pay cut," Schiff concedes. "It screws up my life." If he wins, he'd likely have to give up his securities licenses.

He pauses. "The country's in serious trouble. We're not going to change anything by sending the same bureaucrats back to Washington."

ON DODD'S TRAIL

Three Republicans are officially in the race:*State Sen. Sam Caligiuri, Waterbury; former mayor*Tom Foley, Greenwich: former U.S. ambassador to Ireland and Bush fundraiser* Rob Simmons, Mystic; former 2nd District congressman

One Democrat is officially challenging:*Merrick Alpert, Mystic; businessman, former U.S. Air Force officer